The world economies are tumbling. Greece is trying to get more days…Chinese economy is foundering and there us downside pressure on the US markets too. A collapsing economy directly means that the money flocks to gold. But the markets have something else to say.
The precious-metals sector is enduring losses for the third straight week. Gold has also rallied yet remains dangerously close to making a new weekly low for the bear market.
The metals opened lower on Monday in the shadow of the Greek ‘no’ vote but ended the day mixed with average losses of one percent.
Precious metals prices moved away from recent lows in trading on Thursday morning after Fed minutes failed to provide a clearer picture on when the normalization of US monetary policy might begin.
Investors seem to believe this latest chapter in the multi-year negotiations process will end in Greece remaining in the Eurozone – the euro was last up 0.8 percent to 1.1130 against the dollar.
A $60 billion bailout plan is headed to the Greek parliament. It includes most of the austerity measures Europe has insisted upon and the gross dollar amount of the bailout is slightly higher. We shall see next week what happens and how it affects markets.FOMC and Interest Rate Hike– “Based on my outlook, I expect that it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy,” Yellen said in her speech in Cleveland.
Friday, Yellen said, in a speech at an event in Cleveland, that she still expects interest rates to rise later this year but also acknowledged factors that continue to hold back the U.S. economy, including potential foreign threats.China- GOLD BULLION prices rose Thursday against all major currencies, recovering all but $1 of the week’s earlier $20 drop per ounce against the US Dollar as world stock markets gained following a hard bounce in China’s main equity indices.
With trading still halted in around half the shares listed on the Shanghai and Shenzhen stock markets, the CSI300 index of the biggest companies closed 6.7% higher after the last 3 week’s near one-third collapse.
Global market tensions may ease out next week with Greece expected to find some resolution to its ongoing credit crisis and Chinese leaders expected to keep a tight grip on equity markets to prevent another major market selloff.
- Markets will receive retail sales data for June
- Regional manufacturing data for July
- Consumer inflation data at the end of the week
Market participants are expected to go through her indication extremely careful to find any hints on when the central bank will pull the trigger on an interest rate hike.